Wednesday, November 30, 2011

Chiquita Moves Headquarters to North Carolina

Chiquita Moves Headquarters to North Carolina
Nov 30, 2011
Banana giant bring 375 jobs to Charlotte

This is an interesting video as it points out how governments attempt to bring businesses and jobs to their states and cities with incentives and how that may not always pan out. With Chiquita moving its headquarters from Cincinnati Ohio to Charlotte North Carolina. Apparently the Cincinnati incentivized Chiquita to “create” 90 jobs and the Charlotte government anticipates that the move will lead to a “creation” of 375.

These are interesting estimates as they assume that these jobs will come from the people of these respective cities. I think that most if not all of these jobs come from Chiquita promoting people from their other branches around the nation. With something as technical as logistics and upper management I would think that a company like Chiquita would want to promote from within their own company so that they are certain that the individuals filling these positions have the experience necessary to fulfill the duties of the new position.

I also wonder what the chief differences in the business climate are that have led to this choice. It would be interesting to look into whether either city follows development that is highly structured by the government to reduce sprawl.

According to the Sun Times, Charlotte offered 22 million. It seems that each city has made a public stance on how valuable they deem each job in their city. With an offer of 22 million on the table in the hopes that it means 375 residents of Charlotte will get hired by Chiquita, doesn’t that mean Charlotte is willing to pay close to $60,000 per job that is created? In fact, the average job is supposed to be around $107,000. If companies sell out to the highest bidder then local governments are contributing to their own demise.

Absorbing Chiquita’s risk to relocate is not a role of government in my view. This practice just encourages companies to locate away from where they would be most profitable. It is also most likely not in the best interests of the city because they could be setting themselves up to have a lot of vacant buildings from companies that relocated there because of artificial funds infusion of subsidies.

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